March/April 2011
IP Litigator
Authored by Naresh Kilaru
After years of negotiations, multiple drafts, and a host of controversy, participants in the Anti-Counterfeiting Trade Agreement (ACTA) negotiations announced on November 15, 2010, that they have finalized the text of the Agreement after resolving the few issues that remained outstanding after the final round of negotiations in Tokyo.
The ACTA's goal is to establish a comprehensive international framework that will bolster the ability of member countries to combat the infringement of intellectual property rights, in particular the proliferation of counterfeiting and piracy. It includes provisions on civil, criminal, border, and digital enforcement measures and is meant to help member countries coordinate enforcement efforts. Participants in the negotiations include Australia, Canada, the European Union and its member states, Japan, Korea, Mexico, Morocco, New Zealand, Singapore, Switzerland, and the United States.
The ACTA has sparked controversy both for its substantive provisions and for the perceived secrecy in which its negotiations were held. While some of the more controversial aspects of the agreement were left out of the final text, opposition to the ACTA continues.
Additionally, the ACTA aims to improve members' current enforcement practices by utilizing up-to-date technology to identify counterfeit goods and locate those responsible for their production. The ACTA also encourages various "best practices" to battle counterfeiting in the longterm, such as developing specialized intellectual property expertise within law enforcement and educating the public about the importance of intellectual property rights protection.
The ACTA covers trademarks, copyrights, industrial designs, patents, and geographical indications. As to geographical indications, because the ACTA does not purport to change any member country's existing laws, those provisions may not be applicable in the United States since US law currently does not protect geographical indications in the same manner they are protected in Europe.
The final text recently released by the ACTA negotiators contains six chapters. The heart of the agreement is Chapter 2, "Legal Framework for Enforcement of Intellectual Property Rights," which contains a framework for civil enforcement, border security measures, criminal enforcement, and enforcement of intellectual property rights in the digital environment. This chapter also contains several provisions on counterfeiting.
The civil enforcement section provides that, when assessing damages in trademark and other counterfeiting cases, judicial authorities in member countries should consider "any legitimate measure of value submitted by the rights holder," including lost profits, the value of the infringed good/service, market price, or retail price. As to injunctive relief, third parties connected with the infringement (i.e., warehouses, distributors, etc.) can be enjoined. The ACTA also provides a global standard for seizure of assets.
The section on criminal enforcement provides that those gaining a commercial advantage from counterfeit products, even indirectly, can be subject to criminal penalties. For example, a company's use of unlicensed software could potentially subject it to liability. The ACTA also provides law enforcement officials with ex officio authority, meaning those officials no longer have to wait for a complaint from a rights holder to initiate enforcement action.
Chapter 2 also includes a section entitled "Enforcement of Intellectual Property Rights in the Digital Environment." This section requires member countries to ensure that the enforcement procedures set forth in the civil and criminal enforcement sections apply equally to the digital environment.
Some of the most controversial aspects of the ACTA were stripped during negotiations. The ACTA does not make ISPs liable for infringing activity carried out by their users (as had been proposed by some countries), but authorities can order ISPs to disclose information to identify alleged infringers when an infringement claim has been filed. A so-called three strikes rule supported by the United States would have provided for the termination of subscriptions and accounts of repeat infringers. This provision was dropped after opposition from European negotiators. Various other US-backed provisions that would have mimicked the US Digital Millennium Copyright Act also were dropped after European opposition.
The ACTA negotiations as well as the agreement itself has been the subject of widespread scrutiny and criticism. One point of contention has been that emerging markets such as China, India, Russia, and Brazil, are not members. Some of these countries have openly expressed their opposition to the ACTA. For instance, China has argued that the ACTA could undermine TRIPS and other existing agreements, create trade barriers, and restrict countries’ allocation of intellectual property enforcement resources.
The ACTA negotiations signal a recognition that intellectual property enforcement and the prevention of counterfeiting is a global task that will require cooperation across borders. The ACTA's goal of implementing a uniform set of rules governing enforcement is an important step forward for combating counterfeiting worldwide.
Reprinted with permission from the IP Litigator, published by Aspen Law and Business. This article is for informational purposes, is not intended to constitute legal advice, and may be considered advertising under applicable state laws. This article is only the opinion of the authors and is not attributable to Finnegan, Henderson, Farabow, Garrett & Dunner, LLP, or the firm's clients.
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